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When Leaving Your Job, How to Take Your Colleagues With You CASE HISTORY: Martina's skills, education, experience and personality all combined to elevate Martina into an enviable position. A naturally outgoing personality, an MBA in Marketing, and a background in biology together formed a rock solid platform for her role as Chief Innovation Officer at a growing biotechnology firm. For Martina, her job was fun, fulfilling and full of future growth potential. As Chief Innovation Officer, it was Martina's job to help her company's employees (a) identify, (b) assess, and (c) if of sufficient value, patent innovative improvements they had come up with - or even stumbled upon - in the course of their daily work. What seemed to researchers, investigators and technicians as simple improvements that helped them do their daily work with less effort, less time and improved effectiveness, often turned out to be highly valuable - and patentable - innovations. If an employee brought to Martina's attention an innovative improvement that resulted in the issuance of a patent, that employee was eligible for a bonus that might range from $1,000 to $25,000, depending on the patent's apparent value. Martina's job was to create a "culture of innovation," to the benefit of all, which she did with passion and success. During her six years with the company, her department had collected over $11 million in patent licensing and royalty payments from the innovations her team had identified and brought to fruition. In that same time period employees were awarded over $335,000 in rewards for helping do so. Martina was her department's first employee. From her first day on the job onward, Martina devoted considerable time and effort to putting together a team of six first-rate professionals who worked together like a well-oiled machine. She depended on each of her team members, and they depended on her, in an interdependent, highly productive way. However, one aspect of Martina's personality did not fit well with her otherwise dream job: an entrepreneurial spirit. For many years she had dreamed of owning her own company. She wondered if she could do what she now did, but as an independent consultant working for many different companies to help each one of them create a "culture of innovation." To do that she would need to do one thing: either build a new team, or bring with her the team of six people she had developed while working for the biotechnology firm. With this in mind, Martina consulted us on how to do the latter, that is, bring her team with her, and what problems she faced in doing so. With our guidance, significant forethought, and careful planning, Martina opened her own company, and managed to take with her five of her six team members. Today she's sitting on top of the world. LESSON TO LEARN: Valuable employees are the number one asset of any company. Identifying them, hiring them, training them, motivating them and retaining them are the most important challenges facing employers. In making a move from one employer to another, or in starting a new venture, taking your most valuable colleagues with you might well determine your ultimate success. Taking your colleagues with you to a new job or a new business venture can be a difficult and tricky task. Companies go to great lengths to prevent the loss of their valuable employees. The law, itself, sets up certain roadblocks to taking colleagues with you. There are, though, certain things to keep in mind, certain steps to consider, and certain precautions to take, to help you take your colleagues with you, with reduced risks and with greater chances of success. As you would do with any important goal, make a plan that you believe will most likely lead you to that goal, and that takes into account important considerations to lead you along the right "path" to that goal. WHAT YOU CAN DO: There are twelve steps you can take to increase your chances of successfully taking your colleagues with you when transitioning out of employment. These twelve steps will more likely lead you to a successful transition accompanied by colleagues you wish to "take with you." 1. Understand Your Duty of Loyalty, and Its Limits: The law views employment as a relationship with certain unspoken rules that employment lawyers call "implied covenants." One of those is the employee's "implied covenant of loyalty" to the employer. This implied covenant of loyalty requires that employees must maintain "loyalty" to their employers while they are employed, one part of which is to refrain from acting against your employer's interests. It is a breach of this "implied covenant of loyalty" to try - while you are employed - to get another employee to leave his or her job. However, once you are no longer employed by your employer, the duty to be loyal ceases immediately and totally. In considering "how far you can go" before you breach your duty of loyalty, understand that there is no "black and white," "on and off," or "bright line that cannot be crossed." Instead, most discussions of departure fall into a very "gray" area. Can two employees discuss leaving together, without "getting into trouble?" Probably. Can one employee ask another employee if he or she ever thought of leaving, without "getting into trouble?" Probably. Can one employee ask another employee what he or she would say if an opportunity arose, without "getting into trouble?" Probably. Can one employee openly ask several employees to leave with him or her, or in an email urge other employees to quit, without getting into trouble? Probably not. 2. Understand, too, that Preparatory Steps are Generally Permitted: An employee interested in transitioning to a new employer, or opening his or her own business, may, while employed, take preparatory steps to reach his or her intended goal, including such things as preparing strategic plans, negotiating terms of new employment, renting office space, having stationery designed, and opening up a bank account. The employee's duty of loyalty does not prohibit such preparatory steps, as it does prohibit taking any affirmative steps to act against the employer's interests, such as soliciting the employer's employees or customers to leave. Those would clearly be "over the line." 3. Have You Signed a "Non-Solicit," "Non-Hire" or Other Such Agreement?: It is critical to determine whether you have agreed - in one form or another - not to interfere with the relations between your colleagues and your employer after your employment ends. This would not be an extension of the "implied covenant of loyalty" that exists during employment, but rather a separate and distinct "contractual promise of future non-interference" after employment ends. Such a contractual promise would be expressed something like this: "During my employment by the company, and for a period of 24 months after it ends, regardless of the reason it ends, I will not, directly or indirectly, on my own behalf or as a principal or representative of any person or entity, solicit or induce any employee of the company to terminate his or her relation with the company." Such agreements can be found in many different places, sometimes effectively "hidden" in such diverse locales as (a) a non-solicitation agreement, (b) a confidentiality agreement, (c) a non-interference provision of a stock or stock option plan, (d) a clause in an employee handbook, or perhaps even (e) a clause in an employee Code of Conduct. If you have committed yourself in this way, you will need to find your best possible route to "navigate" around it. (See the next two Steps for ways you may be able to do that.) If you are not sure if you have committed yourself in this way, you might consider asking Human Resources for their assistance in this regard. While it may arouse suspicions about the reasons for your request, it may be worth the rather minimal risk, depending on your circumstances. 4. Even If You Have Signed Such an Agreement, It May Contain Words of Exception, Limitation or Condition: "Exceptions": In some agreements, you may be prohibited from soliciting or hiring only employees with whom you have worked during a certain period of time, or on a certain project, thereby excepting all others. Likewise, certain levels of employees may be exempted from such prohibited solicitation. It is common that former employees are left out of prohibitions, too. "Limitations": If you have signed such an agreement, you need to determine whether you have agreed not to "solicit" (an "active" verb) or "hire" (a "passive" verb) your colleagues. If the former, you have a far wider range of conduct that is permissible. For example, if you agreed not to "solicit," and then a colleague approaches you, seeking a new job, as opposed to you going to the colleague, then you are not "soliciting" him or her, and you can hire the colleague if you wish to. On the other hand, if you agreed not to "hire," and then a colleague approaches you seeking an new job, you cannot hire him or her, even if you want to. Don't forget that almost all prohibitions on hiring colleagues are limited in duration, and expire on their own after a certain period of time. "Conditions": Also, many times obligations not to solicit or hire your colleagues are conditioned upon your voluntary employment departure by resignation, and are inapplicable to involuntary terminations, for example, resulting from widescale reductions in workforce. The important message is this: read every word, and then read every word again; you will often find an exception, limitation or condition on any restrictions affecting you. 5. Also, Defenses to Such Restrictive Agreements May Be Available to You: Restrictive agreements have both legally-based and business-related limitations on their application. For example, in court such restrictions may be found unenforceable for many different reasons, including if (a) the employer has engaged in any related misbehavior, (b) the employer has not promptly acted to protect its interests, or (c) the employer cannot establish that it will be irreparably harmed by the employee's actions. Likewise, if a very large client tells your former employer that it wants to continue using your former employer's services, but also wants to use your and your colleagues' services, in conjunction, as consultants, and would "appreciate" it if your former employer did not interfere with that arrangement, quite likely your former employer will simply "back off." Our experience is that business-related "defenses" are more powerful than legally-derived ones. An experienced employment attorney can help you identify potential defenses and will remind you that "the best offense often is a good defense." 6. Be Aware that Colleagues Have Their Own Perspectives, Interests and Motives: A miscalculation often made by employees seeking to leave and take colleagues with them is to forget that their colleagues likely have their own perspectives, own interests and/or own motives. This is not a cynical view, but a realistic one, for every person sees things through their own eyes. It is extremely important to spend time giving thought to how others may see problems, situations and opportunities, and not to assume they share your perspective. What makes sense to a 52-year-old executive may not make as much sense to a 31-year-old manager. One person may have more financial resources, and thus be better able to survive lengthy periods without income. One person may find relocation a problem, while another may view relocation a positive. Spend some time asking probing questions, and listening intently to both the answers given and the "music between the words." 7. Restrictions May Also Extend to "Taking" Vendors, Suppliers, and Contractors With You: Restrictive agreements may also serve to prohibit soliciting or transacting business with vendors, suppliers or independent contractors with whom you have transacted your employer's business. Sometimes these agreements use the phrase "do nothing to divert or interfere with" such business relations, which would - at least arguably - prohibit doing business. 8. A Powerful Way to Motivate Others to Join You is to Offer Them "Equity": Perhaps the best way to motivate colleagues to consider transitioning either with you or after you have done so is to offer them "equity," that is, a chance to have some sort of "stake" in the product of their future efforts, in some shape, form or fashion. A chance to become something of an "owner" does not come around often, and is with some people the greatest motivator. There are myriad ways to offer "equity," from partnership to stock ownership to "your name on the door." The sweet siren song of equity cannot be underestimated. 9. Never Use Company Emails When Communicating about These Matters: Though you would think common sense would prevent employees from doing so, I've seen several clients use company emails to ask other employees to leave their jobs, and join them elsewhere. Email use is so common and so casual that people seem to forget how easily discoverable they are by employers. And don't think for a moment that you can erase an email without leaving behind a trail of evidence that you did so; that is just not possible. I even recommend against using personal emails to ask other employees to leave their jobs, or to discuss related matters, as it is so easy to accidentally send, forward, reply or broadcast your emails to other, unintended recipients, to your grave danger. 10. Avoid Taking Documents or Files with You: When leaving your job and trying to take colleagues with you, it's important not to also take any documents, materials or computer files with you. Why? There are few things that will enrage employers more, and be viewed with greater concern by judges, it is allegations of simultaneous theft of trade secrets. It is just in the nature of these things that encouraging colleagues to leave with you is not as "hot button" an item in employment disputes, as is allegations of "theft of trade secrets." In fact, "theft of trade secrets" is a crime in many jurisdictions. As noted in an earlier newsletter on the subject of "unintentional theft of trade secrets," you may inadvertently "steal" trade secrets if you leave on your home computer documents, files and other materials that you sent home weeks, months or even years earlier so that you could work at home on evenings or weekends. It may be wise to replace the hard drive on your home computer to remove any "evidence" of your accidentally and unintentionally having done so. 11. Perhaps the Greatest Risk is to Try to Avoid All Risks: This point is one that comes up in each and every consultation with each and every client in these circumstances. Every step in life, business and work involves some type and amount of risk. Risk is an inherent, unavoidable, integral part of business, not to be feared, but to be managed. Indeed, the riskiest things can yield the greatest rewards. It is not smart to try to avoid all risk, but it is smart to try to prevent as much risk as possible, and to be prepared in case risks become realities. Remember what Louisa May Alcott said, "I no longer fear the storms, because I am learning to sail my ship." 12. In Any Job Transition, It is Wise to Have an Employment Attorney "On the Ready": On the "highways of life," most accidents take place on the "on ramps" and "off ramps." When transitioning from one form of employment to another, many legal issues arise that otherwise lay dormant. It may be wise to obtain a legal consultation before any such transition to make sure you are aware of potential issues. An experienced employment attorney can also help you "navigate" around potential "roadblocks." It can only help you to have a knowledgeable attorney familiar with your circumstances and goals ready to jump into the fray in case any disputes arise. These "12 Steps to Successfully Take Colleagues with You" are important to know, and good to keep in mind, if you are planning a job transition. Bear in mind, though, that they are generalizations only, as every person's facts, circumstances and goals are unique, and require unique analysis and approach. Life at work these days is such that you never know when you will be in need of these insights. That's why they are here presented to you, and available to you if you should ever need them. A note about our Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.
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